Turkish Firm Preps Maiden Hedge Fund

Jan 19 2010 | 9:19am ET

Istanbul-based asset management firm Kronos Investment Advisory is aiming to capture the upswing in the Turkey’s equity market with a new market neutral hedge fund.

The new vehicle, which is slated to launch this quarter, combines various valuation, quality, liquidity and behavioral models to invest in a long portfolio of 100-150 stocks that are listed on the Istanbul Stock Exchange.

“Due to the current difficulty of shorting stocks, the product right now is long only employing beta-hedged shorting index futures to arrive at a target zero-beta portfolio with annual risk of approximately 10%,” Cenan Civi, founder, told FINalternatives.

Civi is bullish on the transitioning of the Turkish market from an emerging market to a developing one.

“Turkey’s inflation has come down from as high as 80% since the beginning of 2001 to single digits. Out of the 1,000 largest corporations in turkey, 850 of them are now listed on the stock market so we expect many IPOs. All of these factors go hand in hand and the Turkish market will grow in many multiples over the next decade,” he said.

Civi previously worked as an investment analyst in Chicago at the Kinship Trust Company, a large single family office that manages a portfolio of private equity funds, hedge funds and emerging markets equities.

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